FTC ap­peals Ge­or­gia case to U.S. Supreme Court

Modern Healthcare - - LATE NEWS -

At­tor­neys for the Fed­eral Trade Com­mis­sion have filed an ap­peal with the U.S. Supreme Court seek­ing to stop the ac­qui­si­tion of a hospi­tal in south­west Ge­or­gia by the public body that owns the health­care provider’s only com­peti­tor, Phoebe Put­ney Health Sys­tem. The FTC says the $198 mil­lion ac­qui­si­tion of Palmyra Med­i­cal Cen­ter by the Al­bany-Dougherty Hospi­tal Au­thor­ity il­le­gally con­sol­i­dates the mar­ket for acute-care hospi­tal ser­vices in a six-county area, rais­ing a strong risk of higher health­care prices. The com­mis­sion has waged a year­long court bat­tle to stop the Dec. 9 pur­chase, los­ing at the fed­eral dis­trict and ap­peals court lev­els. The hospi­tal au­thor­ity legally owns the only other hospi­tal in Al­bany, which is op­er­ated un­der a $1-a-year lease by an in­de­pen­dent not-for-profit, Phoebe Put­ney Health Sys­tem. At the heart of the case is a le­gal prin­ci­ple in Supreme Court case law called the “state ac­tion doc­trine,” which says states and their po­lit­i­cal sub­di­vi­sions may take an­ti­com­pet­i­tive ac­tions in some cases that would be il­le­gal if pri­vate com­pa­nies tried the same thing. At­tor­neys for the Ge­or­gia hospi­tal au­thor­ity say they have the le­gal right to con­sol­i­date Palmyra into Phoebe Put­ney Health Sys­tem be­cause its public own­er­ship ex­empts the trans­ac­tion from fed­eral an­titrust laws. The FTC says that ar­gu­ment is a pre­text for shield­ing what is es­sen­tially a pri­vate trans­ac­tion, since the au­thor­ity took no steps to en­gi­neer the pur­chase of Palmyra from its for­mer owner, for-profit HCA. Rather, ex­ec­u­tives with Phoebe Put­ney Health Sys­tem ne­go­ti­ated with HCA and then pre­sented the deal and all its terms to the au­thor­ity for ap­proval, ac­cord­ing to court records.

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